Amber Enterprises mobile ramp and PCB expansion underpin multi-year electronics growth

1QFY27 Performance: Revenue Miss, but Profitability Held Up

Motilal Oswal Financial Services characterises 1QFY27 as mixed for Amber Enterprises. Consolidated revenue grew 13 per cent year on year to Rs 3,887.7 crore, 14 per cent below the broker’s estimate. EBITDA increased 22 per cent to Rs 312.1 crore, below the estimate of Rs 339.1 crore, while EBITDA margin expanded 60 basis points year on year to 8.0 per cent, broadly in line with the 7.9 per cent estimate.

Adjusted PAT increased 40 per cent to Rs 150 crore, broadly in line with Motilal Oswal’s Rs 140 crore estimate. The result was supported by an in-line EBITDA margin, higher-than-expected other income and a slightly lower tax rate. Margins remained affected by elevated commodity prices, currency depreciation and a sharp increase in Haryana minimum wages.

Segment Performance and Industry Conditions

Consumer Durables Division

The Consumer Durables Division reported 8 per cent year-on-year revenue growth to Rs 2,758 crore in 1QFY27. Margin improved 30 basis points to 7.8 per cent, exceeding the broker’s 6.8 per cent expectation. Management expects FY27 segment growth to broadly track the 13–15 per cent growth expected for the RAC industry.

Consumer-durables margin benefited from low-cost inventory, a richer premium-product mix and rising light commercial AC contribution. However, mandatory tonnage disclosure requirements introduced in July 2026 have resulted in mixed industry inventory and disrupted ordering patterns. Management expects most inventory to be liquidated by Diwali, after which demand should normalise, supported by a stronger summer season from November 2026.

Motilal Oswal forecasts Consumer Durables Division revenue CAGR of 14 per cent over FY26–FY29.

Electronics and Railway Sub-systems

The Electronics Division delivered 29 per cent year-on-year revenue growth to Rs 985.4 crore, in line with estimates. Margin expanded 440 basis points to 10.8 per cent, compared with the broker’s expectation of 8.5 per cent.

The Railway Sub-systems and Mobility Division grew revenue 17 per cent to Rs 144.3 crore, although revenue was 10 per cent below estimate. Margin contracted to 11.3 per cent, below the 17.0 per cent expectation. Management retained FY27 guidance of more than 40 per cent growth for Electronics and 30–35 per cent growth for Railway Subsystems and Defence.

Management remains confident of meeting its guidance despite disruption at ILJIN, as production can be shifted across geographically diversified facilities.

Mobile Manufacturing and Electronics Expansion

Oppo Collaboration and Mobile Ramp-up

Amber Enterprises’ mobile manufacturing collaboration with Oppo is a major growth driver. Trial production is expected in 4QFY27, followed by commercial production in 1QFY28. Management expects approximately 8 million units in the first year and around 15–16 million units in the second year.

A dedicated chief operating officer has been appointed for the mobile vertical. Export opportunities may be assessed after the first year of domestic production. Motilal Oswal incorporates Oppo volumes from FY28 onwards, driving its Electronics Division revenue forecast from Rs 4,248 crore in FY27E to Rs 14,105 crore in FY28E.

PCB, CCL and AC Capacity Expansion

Amber Enterprises is undertaking significant electronics capacity expansion. Planned investment includes approximately Rs 3,200 crore for an HDI PCB facility at Jewar and Rs 1,000 crore for a multi-layer PCB facility at Hosur. The Hosur facility is expected to be operational during FY27, while Jewar trial production is targeted in around 18 months.

ECMS approvals for approximately Rs 500 crore of investment at Shogini Pune take the identified electronics-expansion pipeline to about Rs 4,700 crore. Management is also evaluating a copper clad laminate joint venture and expects an owned CCL facility by FY29–FY30. This could improve supply security and reduce reliance on imported CCL.

A new mega AC plant is planned to begin construction in FY28, with trial production expected in FY29.

Estimates, Earnings Outlook and Valuation

Motilal Oswal reduced its FY27E and FY28E estimates by 14 per cent and 2 per cent respectively, reflecting 1QFY27 revenue and margin performance and the timing of Oppo volumes. The broker forecasts revenue and EBITDA CAGR of 39 per cent and 32 per cent respectively over FY26–FY29.

The broker reiterates its Buy recommendation with a revised two-year forward DCF-based target price of Rs 8,250.

Key Risks

• Weaker-than-expected RAC demand.
• Changes to BEE norms that increase product costs.
• Changes to the announced capital-expenditure policy.
• Increased competition across RAC, mobility and electronics.